After studying in Lycée Henri-Quatre's "classes préparatoires BL", Duflo entered her undergraduate studies at École Normale Supérieure in Paris to study history. In her second year at university, she questioned her future as a professor and began considering a career in the civil service or politics. She spent ten months in Moscow starting in 1993. She taught French and worked on a history thesis that told how the Soviet Union "had used the big construction sites, like the Stalingrad tractor factory, for propaganda, and how propaganda requirements changed the actual shape of the projects." In Moscow, she also worked as a research assistant for a French economist then connected to the Bank of Russia and, separately, for Jeffrey Sachs , the American economist at Harvard advising the Minister of Finance. The research posts helped her to conclude that "economics had potential as a lever of action in the world" and she could satisfy academic ambitions while doing "things that mattered."

Her PhD dissertation focused on effects of a natural experiment from data of an Indonesian school-expansion program of the 1970s to provide the first conclusive evidence that in a developing country, more education resulted in higher wages.

The US magazine Foreign Policy named her as one of the top 100 public intellectuals in the world in May 2008.[15] In 2010, Foreign Policy again named her to its list of top 100 global thinkers.[16]The Economist lists Duflo as one of the top 8 young economists in the world.[17] She was named one of Time Magazine's 100 most influential people in the world in April 2011.[18]

In April 2011, she released her latest book Poor Economics, co-authored with Banerjee. It documents their 15 years of experience in conducting randomized control trials to alleviate poverty.[25] The book has received a very positive acclaim. Nobel LaureateAmartya Sen called it "a marvelously insightful book by the two outstanding researchers on the real nature of poverty."[26]